Mark A Cella On Recession Advertising

Mark A Cella on Depression Advertising

In an article dated 4-17-09 called ‘Burger King to Boost Ad Spending’ distributed on the AdAge website, authored by Emily Bronson York, cites Marketing Director, Russ Klein, who acknowledges the strategy of the company to fiercely boost ad budgets amidst financial hard times.

Mr. Klein obviously sees great opportunity in recession stating:

“…there is strong historical evidence around companies that step up with their innovation and advertising and their ability to move through economic downturns and they emerge with stronger brands on the other end.”

Mark A Cella on Recession Advertising

Jim Surowiecki, author of Hanging Tough, published by New Yorker Magazine on the financial page back in April of 2009, advocates that much research indicates businesses who regularly devote resources in marketing and R&D during hard financial times end up extraordinarily better monetarily.

Mark A Cella on Economic Recession Advertising

The article cites a 1927 study by economist Roland Vaile that found that “firms that kept ad spending stable on recession advertising or increased it during the recession of 1921-22 saw their sales hold up significantly better than those which didn’t.” Similarly:

“A study of advertising during the 1981-82 recession found that sales at firms that increased advertising or held steady grew precipitously during the next three years, compared with only slight increases at firms that slashed their budgets. And a McKinsey study of the 1990-91 recession found that companies that remained market leaders or became serious challengers during the downturn had increased their acquisition, R. & D. and ad budgets, while companies at the bottom of the pile had reduced them.”

In a very large study of business conduct, by Strategic Planning Institute, derived that corporations which decreased investing in advertising during recession arose far slower in the following years after economic hard times, as opposed to free-spending competition.

Mark A Cella on Recession Advertising

During the great depression Miracle Whip was introduced by Kraft in 1933 and became the best-selling dressing in America within six months. Texas instruments introduced the transistor radio during the 1954 recession and Apple did the same with the iPod in 2001.

Surowiecki points out an encouraging sample of recession success achieved by Kellog’s huge success during the great depression:

“While Post Cereals…cut back on advertising (during this period,) Kellogg doubled its ad budget and by 1933, even as the economy cratered, Kellogg’s profits had risen almost thirty percent and it…became…and remains the industry’s dominant player.”

The preponderance of historical evidence is strongly conclusive. Companies can significantly benefit by employing bold strategies during recession.

Surviving in this system of debt, known as our economy, is won by those stepping up to the plate and taking a chance when no one else will.

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